Pune: Fixed Deposit (FD) has gained a lot of popularity in country due to being a most secure investment option, but now people are less attached to FD. The main reason for this is declining interest rates. According to SEBI Registered Investment Advisor Jitendra Solanki, the interest rates on FDs have been reduced by three to four percent for the last one to two years. Earlier, where major banks used to pay more than 7 percent interest on FD, they are now offering less than 5 percent interest rate. In such a situation, people are looking for other options for investment.
The excellent and secured options more than FDs for investment are Sukanya Samriddhi Yojana (SSY) and Voluntary Provident Fund (VPF).
Sukanya Samriddhi Yojana
It is a government-backed savings scheme under Beti Bachao, Beti Padhao Yojana campaign. The intention of the campaign is to benefit the girl child. Parents of a girl child below the age of 10 can open the Sukanya Samriddhi Account. It has a tenure of 21 years or until the girl child marries after the age of 18. This scheme offers an interest rate of 7.6% compounded annually. The minimum annual contribution to the Sukanya Samriddhi Account is Rs.250 and the maximum of Rs.1.50 lakh in a financial year. You have to invest at least the minimum amount every year for up to 15 years from the date of account opening. Thereafter the account will continue to earn interest till maturity.
One can invest in this scheme through your nearby post office or designated branches of participating public and private banks. You will need to submit KYC documents like Passport, Aadhaar Card, etc. along with the required form and initial deposit by cheque/draft. This wide reach is designed to help ensure success of the Beti Bachao, Beti Padhao Yojana.
Voluntary Provident Fund
The VPF option is available only to salaried individuals who receive their monthly payments through a specific salary account.
The Government of India will pay the employer and employee contribution to EPF account of employees for another three months from June to August 2020. The benefit is for establishments with up to 100 employees and where 90% of those employees draw a salary of less than Rs 15,000 per month. The contribution to EPF is reduced to 10% from 12% for non-government organisations. A VPF is an extension of the EPF. The VPF falls under the EEE categorymaking it an excellent tax saving option.